"shares_2504"

This is a summary of what is a share,explaining how we know the share value and the market price.

A share is the manner in which investors participate in an company.Also getting a stake in the company's assets and property and a vote, proportional to the size of the investor's holding, in the company's business at its annual general meeting (AGM).

The assets of the company comprise its cash-in-hand, property (land, buildings, fittings) and the company's stock of raw materials and work-in-hand, less its liabilities in the form of borrowings or payments to creditors.

Nominal Share Value represents the asset value of the company,while the market value which represented both the worth of the assets and their ability to make money.A 25p nominal share reflects the earnings potential of the company.The total of the nominal sum of all the issued shares is the issued share capital of the company.
There are in existence some non-voting shares for certain companies,the holder has no vote in the company's strategy. The original idea of these shares was to enable control of the company to be retained.these non-voting shares are unpopular with major investors,making a gradual conversion from non-voting to voting status. The holders of the original voting stock are usually rewarded by an increased allocation of stock.

The dividend of the company is that proportion of its profits paid to its owners, the shareholders.Normally a company will pay only part of its profits as a dividend. The remainder is retained to fund internal growth of the company. It may also serve as a store of 'fat' with which to maintain dividends in lean years, when the profit is falling.
The company's profits are known as its earnings. When the earnings are divided by the number of shares in existence, we get the 'earnings per share'.Ratio measures how many years of earnings per share at the current share price would be needed to pay for the shareit is hoped that the earnings and dividends will rise each year, reducing the repayment time of the share price and thereafter all dividends will be pure profit.
stockcan be sold at the current going rate, the 'market price'.

Another important measure is the company's yield. The yield is typically expressed as a net percentage (ie after income tax) of the current share price.
The yields in each country are usually lower than the interest which could be more safely obtained by investment in local bonds, or in the local equivalent of a building society. This is despite the fact that, in general, acceptance of risk entitles the risk taker to a higher return than from a 'safe' investment.However,the lower return from shares reflects the growth potential of dividend payouts

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